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VAT Update: January 2022

There are a number of changes to the world of VAT and Customs in 2022 which we would like to make you aware of. These are:

  1. Making Tax Digital (MTD) mandatory for all VAT registered businesses
  2. New penalty regime for late payment of VAT and late filing of VAT returns
  3. End of temporary reduced VAT rate for leisure and hospitality
  4. Removal of arrival Intrastat
  5. Import changes
  6. Notification of uncertain tax treatment by large businesses.

Making Tax Digital (MTD) mandatory for all VAT registered businesses

MTD will apply to all VAT registered businesses from 1 April 2022. Therefore, VAT returns will need to be filed through compatible software (direct from your accounting software or via bridging software). 

For further information click here.

New penalty regime for late payment of VAT and late filing of VAT returns

The new penalty regime was due to be introduced on 1 April 2022, however this has now been delayed until 1 January 2023.  The new regime will replace the current default surcharge regime. 

For further information click here.

End of temporary reduced VAT rate for leisure and hospitality

The temporary reduction of the VAT rate that applies to the hospitality, hotel and holiday accommodation sectors will end and the VAT rate will return to 20% from 1 April 2022. 

For further information click here.

Removal of arrival Intrastat

From 1 January 2022, Intrastat declarations will no longer be required for the arrival of goods in the UK (except Northern Ireland) from the EU. 

For further information click here.

Import changes

Anyone that spent any time on the motorways over the Christmas period will have noticed the signs warning of changes to imports from 1 January. 

For further information click here.

Notification of uncertain tax treatment by large businesses

From 1 April 2022, businesses must notify HMRC when they take a tax position in their returns for VAT, corporation tax, or income tax (including PAYE) that is uncertain. 

For further information click here.

If you have any questions on the above, please get in touch with VAT partner Alison Birch to the right of this page.

Written 14 January 2022.